Business Logistics 420 Public Transportation Lecture 22: Transit System Governance and Management

Lecture Objectives To understand the legal and organizational framework for public transit systems in the United States To understand typical functional organization charts for transit agencies To understand the differences between public transit management and private sector management

Lecture Objectives To understand and know how to apply a strategic management approach to transit systems

Transit System Governance In the United States (and most of the world) public transit systems are governed and operated by public agencies. The exact structure of the transit organization, its board of directors, its powers and structure, are determined by state or local law and vary from community to community.

Governance Options Independent authority, district, commission (Most systems in Pa.) Part of City/County Government (Williamsport, Pa, Charlotte, NC, Montgomery County, Md.) State (Delaware, New Jersey, Connecticut) Multi-functional agency (Tri-Met in Portland, Oregon)

Pennsylvania Transit System Governance Most public transit systems in Pennsylvania are governed by an authority – a special purpose governmental entity created to operate local transit service. Pennsylvania's transit authorities have been formed following the rules of the state's Municipalities Authority Act of 1945 and, therefore, they are structured similarly.

CATA Example Centre Area Transportation Authority formed by five municipalities as a joint authority. Five-member Board of Directors appointed by the five municipalities – one member from each (state law sets five members as minimum but no upper limit). Board members serve for five-year terms and can be reappointed.

CATA Example (Continued) Board members are not compensated, and they cannot be elected officials (to try to remove politics from board actions). Boards cannot tax, but can enter into contracts, obtain loans, employ staff.

CATA Example (Continued) Boards are responsible for: –Hiring/firing the manager –Determining service areas, service levels, fares, and all other aspects of the transit service –Approve annual operating budgets, obtain public funds –Approve capital budgets and expenditures –Approving labor contracts and other contracts Day-to-day operations of most transit services in US are performed by transit authority employees. The alternative is to contract out services to private firms.

Transit System Organization All transit systems, no matter their size, must perform similar functions. The key difference, based on size of the operation, is the degree of specialization and number of individuals performing the function. Key functional areas include: –Maintenance –Operations (Drivers and station personnel, safety) –Marketing and Sales –Planning –Information and Accounting –General Administration

Transit System Organization Very large systems (more than vehicles) usually decentralize into divisions or garages of vehicles. Multi- modal systems (rail/trolley/bus) usually have separate operation and maintenance facilities for each mode.

Small System Organization Chart

Large System Organization Chart

Austin Texas Transit System Organization

Differences between Publicly Owned Transit Agencies and Private Sector Businesses Profit objective/shareholder value motives replaced by multiple objectives –equity –reduction of externalities of auto travel –political gain Board of Directors either elected officials or appointed by elected officials, and not by stockholders or management

Management of Public Transit Must reflect the differences between private sector and public agency status but -- Most management principles still apply Modern transit management follows some type of strategic management/business plan model.

Strategic Management Information taken from Managing Public Transit Strategically by Gordon J. Fielding Presents a framework for incorporating strategic planning and performance evaluation into the management of transit systems

Five Major Components to Strategic Management Situation Assessment Fiscal Planning Management Performance Evaluation Feedback Mechanisms

Situation Assessment SWOT* Analysis External Analysis of Possibilities Historical Assessment of Expectations Internal Situation – Capabilities Determination of Mission, Goals, Objectives * Strengths, Weaknesses, Opportunities, Threats

Fiscal Planning Capital and operations funding assessment Development and evaluation of alternate strategies Adoption of the most cost-effective strategy Budget Development

Management Development of Implementation Schedule Assignment of Responsibilities –Labor deployment –Service Planning –Organizational development –Marketing –Community Relations Identification of Performance Measures

Performance Evaluation Measure performance Evaluate performance against objectives

Feedback Mechanism Compare results with goals, objectives Modify strategies based on performance

Example Application of Strategic Planning Approach Set Goals –Example: Provide safe transportation Establish objectives –Example: Minimize chargeable accidents –Example: Minimize crime toward passengers

Example Application of Strategic Planning Approach Select Performance Measures –Example: Chargeable accidents/1 million miles –Example: Number of felonies against passengers/ million passenger boarding Set Target Goals for Measures –Example: 1.1 accidents/million miles –Example: 0 felonies/million passenger boardings

Application of Goals, Objectives, Performance Measures to Transit Management As part of the business plan, propose specific activities to improve performance in a particular area –Example: Conduct driver training refresher courses –Example: Hire undercover police to ride buses and trains Set goals for activities like reduce accidents or crimes by 10% in two years Measure results of activities and then modify activities (feedback)

Study Questions How does the organization and management of public transit systems differ from that of private firms? What are the major governance options for public transit agencies in the US? Explain the strategic management model proposed by Gordon Fielding Give an example of how this framework might be applied